Gold prices decline on Monday due to reduced expectations for deep Federal Reserve rate cuts. Stronger-than-expected nonfarm payrolls data supported the dollar, further pressuring gold prices. Spot gold fell 1% to $2,662.20 per ounce, while gold futures expiring in February dropped 1.3% to $2,680.01 per ounce.
The decline in gold prices reflects concerns that US interest rates may remain elevated for longer. Last Friday's payrolls data led traders to adjust their bets on rate cuts, scaling back expectations. Attention is now on upcoming US inflation data, which will provide more insights into the Federal Reserve's rate outlook.
The Fed has signaled its intention to keep rates high due to persistent inflation and a robust labor market. Analysts at Goldman Sachs now predict only two rate cuts this year, compared to earlier forecasts of three. They also foresee a higher terminal rate during this cycle.
Despite rate concerns, safe-haven demand for gold remains due to economic uncertainty and volatility in risk-driven assets. Political changes, such as President Donald Trump’s incoming administration, have added to market uncertainties. These factors, coupled with a broader sell-off in stocks, have limited losses in gold prices.
Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, pressuring the market. On Monday, other precious metals also faced declines. Platinum futures fell 2.6% to $970.35 per ounce, and silver futures dropped 3.3% to $30.282 per ounce.
In contrast, copper prices rose as markets weighed China's economic outlook. Benchmark copper futures increased by 0.2% to $9,098.00 per ounce, while March copper futures rose 0.4% to $4.3217 per pound. China's December trade data showed robust copper imports, hitting a 13-month high of 559,000 metric tons.
The strong demand for copper has fueled optimism that Beijing will introduce further stimulus to support economic growth. Such expectations have helped the red metal sustain gains despite global market volatility.
Don't miss the latest Forex trading updates and expert analysis. For more insights, visit our website: https://fixiomarkets.com/en/prex-blogs.
Gold prices decline as Fed rate hike concerns grow, driven by strong payroll data. Discover more on inflation's impact.
Superior trade execution & trading conditions with the NDD method.
The online FX industry provides a platform for investors worldwide to engage in the buying and selling.
Subscribe to our daily newsletter and get the best forex trading information and markets status updates
Trade within minutes!
日本語
English
Comment (0)